Wells Fargo Recoups $2.5 Million from New Jersey Duo
Two former Wells Fargo Advisors brokers have agreed to repay a combined $2.5 million in deferred bonuses as part of a promissory note dispute with the wirehouse, according to a Financial Industry Regulatory Authority arbitration award finalized on Thursday.
Hart, a 27-year brokerage veteran, and Tonkovich, a 13-year broker, had initially sued Wells in December 2017, the month of their departure, with a claim for unspecified damages tied to fraudulent inducement, negligent misrepresentation, breach of contract and constructive termination.
Wells Fargo responded with a counterclaim accusing them of breach of six promissory notes and seeking $2.75 million in damages, including $2.1 million in damages from Hart and $644,000 from Tonkovich as well as costs and legal fees.
Reached at Morgan Stanley, Tonkovich declined to comment on the circumstances behind the claim but said they were “happy with the outcome,” which was less than what Wells had first sought.
Hart, who leads their five-person group, did not return a call for comment, and their lawyer, Thomas H. Chiacchio in Philadelphia, did not return a request for comment.
A spokeswoman for Wells Fargo, which has in recent years offered brokers as much as 340% of their total production in deals requiring brokers to remain at the firm for a set number of years, said she could not immediately comment. An arbitration panel earlier this month granted Wells a $3 million award in another promissory note case it brought against an ex-broker serving a five-year sentence over a Ponzi scheme.
The three arbitrators in this case ordered each of the parties to bear their own legal costs and split the $7,750 in filing fees evenly. The panel denied the brokers’ claim for punitive damages and left Wells with the option to seek $3.2 million, including $2.48 million from Hart and $758,000 from Tonkovich, if the brokers do not comply with the settlement.
Hart, who is currently registered at a private residence in Marco Island, Florida, has worked at five firms over his career, including two tours at Morgan Stanley. He first joined Morgan Stanley in 1994 after a rookie year at Equico Securities in New York, then moved to UBS in 2004, shifted to RBC Wealth Management-U.S. in 2008 and then Wells in 2012, according to his BrokerCheck record.
Tonkovich started at UBS in 2007, and moved with Hart in 2008 to UBS and then to RBC and Wells.
The two share one customer dispute on their BrokerCheck records, a 2019 claim over suitability that resulted in a $4,600 award of $50,000 requested.